1. Field of the Invention
The method and apparatus of the present invention relate to electronic commerce applications using digital and analog networks.
2. Background
Computerized marketplaces of all kinds are well known in the art. They range from simple classified ad bulletin boards to complex mainframe-based market systems such as NASDAQ which offers a real-time market-making system for tens of thousands of securities brokers. All modern stock, bond and commodity exchanges are supported by underlying computerized databases and related systems which enable them to function.
Typically, electronic Exchanges are designed to facilitate commercial transactions of tokens of ownership, such as shares of stock, or physical objects such as ounces of gold or a used car. Other Exchanges specialize in the sale of information stored on databases such as that provided by Lexis/Nexis, where users pay fees for accessing articles while content providers are paid per article downloaded. Still other Exchanges provide matching services where each party is seeking an efficient way to find the other, such as might be provided by a dating service or a job bank.
Exchanges whose function is to support a marketplace for the buying and selling of consulting services have been few and far between. Since this type of Exchange supports a form of commercial activity which is meant to take place in the future, the Exchange's role is to serve as a structured meeting ground for the negotiation of the service to be provided. However, an Exchange which performs this type of negotiation service creates what has heretofore been considered an unavoidable "man-in-the-middle" problem. In the process of assisting in the negotiation of a consulting contract, one or both parties must first disclose their identity to the other. Thereafter, if commerce appears likely to occur, one party can simply contact the other directly and privately, without the exchange's knowledge, thereby avoiding any costs which might otherwise have been assessed by the Exchange.
In the past, attempts have been made to establish so-called "information marketplaces" to overcome this problem by providing a wide range of supplementary services to add value to the role played by the Exchange. The most notable example of the many failed attempts to solve the problem was the American Information Exchange, AMIX, a service which was piloted in 1991 and soon thereafter disbanded by Autodesk Inc., a software development company located in Sausalito, Calif.
AMIX's goal was to establish an on-line marketplace for the buying and selling of both information and consulting services where every user could be either a buyer or a seller, with AMIX facilitating transactions between them. The AMIX system required both buyers and sellers to become a member of the service, agree to pay a monthly service fee and then purchase and install a dedicated front-end program. A self-described "electronic farmer's market," parties could negotiate agreements for the sale of information or consulting services which AMIX organized by topic. AMIX offered to serve as a non-binding mediator should the parties have a dispute and select a binding arbitrator if necessary. The system also intended to serve as a central record keeper and funds transfer point, either for the clearing of credit card charges or disbursements from pre-established accounts which AMIX managed. AMIX offered neither anonymity nor the controlled release of identity. Buyers or sellers who identified each other using the service could then bypass the service, though AMIX charged monthly fees so that the financial impact of such off-exchange activities might be offset. Furthermore, it encouraged both buyers and sellers to post comments about each other so that future buyers and sellers would be able to evaluate the past reputations of one another.
To understand the failure of AMIX, and all other prior attempts to create working expert-exchange marketplaces, it is necessary to understand that effective markets, whether they be physical or electronic, require a complete and highly specialized set of conditions in order to function and thrive. A single missing ingredient or feature of service might result in a shortage of either buyers or sellers and lead to the collapse of the Exchange--which needs sufficient quantities of both to continue operation. At the same time, the Exchange must be able to ensure that it can derive sufficient income from the commerce of its activities in order to support the Exchange's cost of operations and make a profit.
All successful Exchanges must be able to motivate significant numbers of both buyers and sellers to use the Exchange versus other available market alternatives. Thus, buyers and sellers must 1) have a high expectation of the usefulness of the Exchange which makes them willing to take the time and effort to learn the rules of the Exchange, and, if necessary, become recognized by the Exchange, 2) locate each other on the Exchange at exactly the right time and place, 3) be able to quickly and easily negotiate transaction terms, 4) reach a complete and final agreement where the expectations of the parties are well defined, 5) arrange for acceptable credit terms, 6) deliver the goods or services called for by the agreement, 7) deliver payment when the agreement is fulfilled, 8) rely on the Exchange to enforce the agreement made on the Exchange with certainty of both payment and legal recourse, 9) find the transaction fees reasonable in comparison to alternatives, and 10) have ready access to the market without levels of knowledge and cost of hardware commensurate with the value of the goods or services sold on the Exchange.
Traditional real world commerce in expertise or consulting services strongly favors circumstances where both parties are, at least occasionally, in the same place at the same time and can see one another. When there is no face-to-face contact between the parties (relying instead on mail, phone, faxes, etc.) significant burdens and costs are imposed on the parties which reduce the likelihood of expert commerce taking place. This is especially true if the parties are located in different countries where differences in language, customs, legal systems, currencies, etc., must be dealt with. Each added burden dramatically reduces the chances for agreement and increases the difficulty of satisfying all of the previously stated infrastructure conditions. Finally, if one or both of the parties in an on-line transaction is a private party (such as a part-time freelance consultant) with no established organization or commercial resources, the problems can become effectively insurmountable.
A hypothetical "worst-case" example illustrates both the range and quantity of problems associated with international consulting where the consultant is a private party. Imagine a professor of nanotechnology at the University of Makinsk, located in Kazakhstan, formerly part of the Soviet Union. Although the professor's teaching schedule keeps him fairly busy, there is not much to do in Makinsk. To relieve the boredom and to supplement his limited salary, he decides the time has come to embrace capitalism by using some of his free time to offer freelance nanotechnology consulting. The professor begins by making a list of what needs to be done before being able to sell his nanotechnology expertise.
To begin, how does he locate potential clients? Finding clients is a difficult task for any service professional. It is hard to know who needs their services, especially in a niche field such as nanotechnology. There are less than five hundred people who might want to hire a nanotechnologist and they are all located within a few dozen companies, research labs and government departments scattered around the world. The professor could rent the mailing list of The Nanotechnology Journal and send out promotional mailings, but this would be expensive and time consuming with no guarantee of success. Even more importantly, such a mailing is unlikely to reach a potential client at the exact moment which the client needs nanotechnology consulting services. Though the professor has some contacts, most of his potential customers are unknown to him, as he is to them. Personal solicitations might be more appropriate, but many of the barriers to commerce remain, including potentially insuperable language barriers. And, once he somehow identifies potential clients, how does he contact them? By mail, by phone, by e-mail? If so, how will potential clients respond to those contacts and where should they send any written materials? He cannot receive them at work and home mail delivery is notoriously unreliable in Makinsk.
Finding a potential client is just the beginning of the process, as the professor and client must now synchronize their schedules. The professor recognizes that he must arrange for freelance work which fits around his other teaching and research commitments. Without an assistant or secretary to arrange the work times, the professor is forced to manage the naturally iterative process of scheduling the work. What the professor really needs is a client whose needs precisely fit his requirements so that he can concentrate on providing the consulting, not scheduling it. His free time occurs normally on weekends and late at night, though his night availability varies widely depending on department functions and projects. Can he find work he could do on Saturday nights from 9:00-11:30 PM local time? If there are large ongoing client projects that need to be done, can he deliver his consulting in small chunks? Suppose he had thirty minutes to spare between classes every Wednesday. Could he locate a client project that required just twenty or thirty minutes to finish each week, like grading nanotechnology exams taken at some faraway university? Suppose the professor finds himself with unexpected extra time. Are there clients somewhere in the world whose time requirements can offer him projects on short notice? For example, if he didn't expect to have free time this evening, and things suddenly changed, could he possible find a client in the next few hours? How about in the next few minutes? Suppose he were willing to work at half his regular rate to compensate for the short notice?
Once the professor finds a client whose needs match the professor's timing constraints, how does he quickly and effectively establish his credentials? Though the professor is highly talented, he is still a relative unknown. The likelihood is that the client has only vaguely heard of the professor and his work. Does he mail potential clients copies of his diplomas and his PhD thesis? How will the client be certain that the information is authentic or will the client have to spend time and money to carefully check out the professor's credentials before going any further? Perhaps he should provide references. If so, is there any way that a potential client can quickly check those references without delaying the whole process and thus missing the window of opportunity for work that is needed right away? How can the professor demonstrate that he is capable of answering a potential client's questions without personally meeting with the client's engineers and scientists? He could mail out academic papers, but they might take weeks to arrive via international mail. There is of course also no guarantee that the client can read Russian, though the professor speaks fluent English. If he is competing with other nanotechnologists for a given assignment, how does he prove that he is not only the superior choice for the client but that he is willing to negotiate a price for his services that is at least 75% less expensive than his comparable competition in the West?
Once a deal is struck, how will the consulting work be delivered to the client? Mail is too slow and Federal Express doesn't serve Makinsk. The work could be sent by e-mail, but nanotechnology consulting is usually confidential in nature. Furthermore, assuming the work is delivered by some kind of encrypted e-mail, how can the professor get a bona fide receipt indicating that the work was actually received by the client?
Credit, payment and currency problems make the professor's consulting business even more difficult to get off the ground. If the professor is fortunate enough to locate a client, establish his credentials, agree on a specific job to be done and the price to be paid, how can he be sure that he is actually going to get paid if he delivers satisfactory work. There are many unscrupulous nanotechnology companies that have been known to prey on ex-communist scientists in the former USSR. These companies either don't pay their bills or claim that the work provided was inferior and not at all what was promised. He can't get paid some part in advance, can he? Even if he extends credit to a specific client, how does the professor arrange for payment when the work is complete? He doesn't take credit cards and he certainly doesn't want to trust the Kazakhstan mail system to handle envelopes stuffed with cash. He has a small savings account at the First National Bank of Makinsk, but depositing checks from foreign accounts is viewed with suspicion and all such checks are subject to long delays and surcharges. What's more, the professor wants any payment he receives to be denominated in dollars or German marks. If he performs work for a French company, how will that company arrange to make the payment to the professor in dollars or marks? And, what happens if the client refuses to pay? Is there any recourse available other than writing the client off and never working for that client again?
Finally, suppose that the professor figures out how to do everything necessary to become a successful consultant. There's just one more thing he wants to achieve. He wants to be able to begin work for a client without revealing his identity to the client. (He may be willing to reveal his identity only after his working relationship is well established and the parties have grown comfortable with each other.) He is very concerned that if his department chairman finds out that he's doing corporate consulting, he might require that the professor give all or part of any foreign currency earnings to the university--no matter that the work was done during off hours. Even worse, the chairman could view the foreign consulting as a threat to his power and either fire the professor for unauthorized activities or forbid him from doing any freelance work, insisting that any such work must be done only by the chairman.
Supporting either all or partial anonymity in expert-based commerce, where at least one party is a private individual, currently presents almost insurmountable challenges. Communication by either standard mail or e-mail is difficult since known addresses are required. The professor could leave his name off the return address or use a false name, but the professor's identity might be easily deduced. Incoming mail from a foreign corporation might result in questions from university officials. Anonymous remailers on the Internet could be used if the work is done entirely in digital form, but what foreign company will hire an expert consultant whose name and address they don't even know? Even if anonymity were preserved, collecting payment while remaining anonymous is probably impossible without using cash which is impractical and often dangerous. And, if the professor wants to provide a client with his diplomas, published academic papers or previous client work as credentials, there is simply no way to maintain his anonymity unless he can find a third party trusted by the client who will vouch for the professor's skill while at the same time concealing his identity.
Yet, with all these hurdles, there is a strong case to be made that as tens of millions of businessmen, government officials, academics and ordinary consumers interact with each other more and more via on-line networks, and since physical distance barriers are meaningless in cyberspace, the demand for worldwide commerce in expert services will grow exponentially in the years ahead. What is needed to unlock this growth is a universally accessible facilitating system which is designed to specifically handle the buying and selling of expert services, as opposed to selling information or simply providing an electronic farmer's market. Much as computerized stock markets were invented that could seamlessly and effortlessly handle transactions of billions of shares of equities, bonds and financial instruments every day, there exists a need for expert-based markets where human experts can reliably sell their services to clients they have never met, utilizing a structured, organized system that facilitates and supports the infrastructure needed for expert commerce. What's more, such an expert market system should allow for entirely new features and qualities of service that were heretofore not possible before the rise of computers, databases and the ubiquitous Internet with its related on-line networks.
Furthermore, though the example of the professor of nanotechnology describes a seller-driven protocol whereby the expert consultant seeks to find and sell appropriate clients, it is equally logical to use the inventive system for buyer-driven applications whereby clients who need to locate and retain appropriate expert consultants can do so on an efficient, ad hoc basis.
The applicant is unaware of the existence of any such commercially viable expert exchange which contains the features described above. Therefore, it is an object of the present invention to provide an efficient method of locating and matching remote qualified experts ("experts") to customers ("clients") who need their expertise by the method and apparatus of the present invention and where the invention addresses the market mechanisms needed that prior inventions have failed to offer. Another object of the present invention is to locate qualified experts even if they are not currently registered with the Exchange. Another object of the present invention is to provide an asynchronous device and system for connecting the client with the expert, transmitting job requests from client to expert. A further object of the present invention is to authenticate the qualifications of the experts. A still further object of the present invention is to allow clients to review prior work produced by an expert. Another object of the present invention is to provide a reliable method for the expert to be paid by the client where such a method can accommodate a plurality of payment systems that may occur independently of the details of the actual payment service being used in a manner that is transparent to both the client and the expert. Another object of the present invention is to enable the expert to be assured of payment for services by the Exchange if the client does not pay for such services. Yet another object of the present invention is to allow for the Exchange to verify a client's ability to pay prior to delivering the completed analysis, or to allow clients to set up escrow accounts for payment. A still further object of the present invention is to allow the client to choose from a list of experts in a field and select a particular expert to provide service, where such service is in the form of expert advice or judgement. A further object of the present invention allows for a user to search a database of experts where the identities of the experts are concealed from the user, but the user may search a database of those experts by certain characteristics and may optionally communicate with those experts without knowing their identity. A further object of the present invention is to provide a real-time connection between the client and the expert during which negotiations can take place or during which advice or judgement can passed between the parties.
Another object of the present invention is to provide a way for clients to have experts evaluate their work. Another object of the present invention allows students to be graded by multiple evaluators. Another object of the present invention is to allow both the client and the expert to remain anonymous while practicing the invention. Another object of the present invention is to allow clients and experts to verify information that is accessible or communicated as part of practicing the invention. Another object of the present invention is to verify the client's or expert's identity and the client's ability to pay for services. Another object of the present invention is to allow for impartial dispute resolution regarding any dispute which arises from the practice of the invention. Another object of the present invention is to allow the expert to be paid for services immediately upon delivery of work contracted for while practicing the invention. Yet another object of the present invention is the ability to verify that communications occurring while practicing the invention have not been tampered with or altered during communication. A still further object of the present invention is to provide a marketplace for any party practicing the invention to either bid on services or to reach an agreement regarding a transaction for such services as the parties may desire. Another object of the present invention is to provide a method for clients to verify the quality of expert answers. Yet another object of the present invention is to provide access to the Exchange without the need for proprietary software.